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Comment: Clifford Chance’s acquisition of Carillion’s managed legal services arm is both a relief and a huge opportunity

I feel an oddly personal sense of relief at the news yesterday (14 February) that Clifford Chance has acquired Carillion’s Newcastle-based managed legal services arm Carillion Advice Services (CAS), in what has the potential to become not just a lower cost UK hub but a centre for innovation and change. 

I feel an oddly personal sense of relief at the news yesterday (14 February) that Clifford Chance has acquired Carillion’s Newcastle-based managed legal services arm Carillion Advice Services (CAS), in what has the potential to become not just a lower cost UK hub but a centre for innovation and change.

I was writing for Legal Week when CAS was born after Carillion acquired heating and renewable energy company Eaga in 2011. A group of highly trained and clever paralegals, the discrete legal unit at Eaga was, until its acquisition by Carillion, handling a fairly limited range of work including, I recall, some legal aid work. But ever-innovative Carillion general counsel Richard Tapp immediately spotted the potential, as he and I often discussed at the time.

At first the newly-named CAS worked on Carillion’s internal employment matters, but it wasn’t long before Tapp insisted that his panel law firms use CAS to take over the more commoditised portion of Carillion’s legal work.

While that may not sound radical now, at the time it caused huge ripples among law firms unaccustomed to carving out their deals in the way that has become if not embraced, then more accepted. I took some delight in hearing at the time about meetings between panel law firms, where Tapp insisted they work out how to divide up and share their work – not just with CAS but one another, as he was also a pioneer of panel firms acting as a collaborative network.

If you’re a Legal Week subscriber with nothing better to do you can read a conversation I had with Tapp all those years ago as to the benefits of CAS – Better out than in – how Carillion’s legal process outsourcing venture worked wonders for the company – although now I fear that has become a bit of ancient history.

As for the acquisition by Clifford Chance, it is a sign of the times that it comes as something of a no-brainer. The Magic Circle giant was one of the pioneers of legal process outsourcing in India and has developed an impressive capability there where others have failed. But it notably hasn’t acquired or developed a regional UK hub in the way that peers including Freshfields Bruckhaus Deringer have.

Freshfields is using its Manchester hub, headed by director of legal services innovation Isabel Parker, to test new technology and drive innovation in a way that can’t easily be done within the main body of a traditional law firm (although Clifford Chance, led by Amsterdam-based head of innovation Bas Boris Visser, is doing a better job of it than many). Lower cost regional offices were once there to satisfy clients that a firm was doing its bit to drive down fees, but they have morphed into much more than that, as firms (and corporates such as Barclays) recognise the bigger opportunities presented by a younger, smaller and more tech-savvy staff.

Not only has Clifford Chance saved over 60 jobs amid the vast number of job losses post the collapse of Carillion, but it has acquired a ready-made team that has previously shown itself capable of great change and growth, and given the opportunity, will no doubt do so again.

Caroline Hill is editor in chief of Legal IT Insider

caroline.hill@liti.co.uk